PRIME MINISTER KOIZUMI: This is my fourth meeting with
President Bush, and we engaged in very candid and very friendly talks
and very useful meeting it was. I was able to renew our
friendship and cement further our relationship of trust and reaffirm to
the importance of Japan-U.S. alliance.

In the fight against terrorism, Japan, on its own initiative, has
been cooperating with the United States and in cooperation with the
international community to eradicate terrorism. And we shall
continue with this firm resole and firm stance to fight against
terrorism in the days ahead, as well.

I expressed my respect for the strong leadership that President
Bush has exercised to date. On September the 11th, these
unforgivable terrorist acts took place. But in this fight
against terrorism, we shall continue -- we shall need to sustain our
cooperation and under international cooperation we need to carry
forward this fight against terrorism.

On these points, again, we saw eye to eye. On the issue
of Afghanistan, the roles that Japan and the United States play will
differ, but we should complement each other in order to make our own
contributions to the reconstruction and rehabilitation of Afghanistan.

Turning to East Asia, as a whole, the relationship between Japan
and East Asia is important for the stability and the peace in the
world. Japan attaches importance to our relations with China
and Korea, and the close coordination between Japan and China and Japan
and Korea is something that I would also like to work on to further
strengthen.

On North Korea, Japan, through cooperation and coordination with
the United States and Korea, would like to work on normalization of
relations with North Korea.

With regard to China, we welcome China's accession to
WTO. And it will be hosting Olympic games in the future, as
well. And I very much hope that China will play important
roles in the international community, and also play its part in the
international community, recognizing its important
responsibilities. In considering the future of friendly ties
between Japan and China and Japan and Korea, we also agree that
Japan-U.S. relations would be very important.

And turning to economic issues. Economic revitalization
in Japan to imbue confidence once again in the Japanese
economy. This is the greatest mission given to my Koizumi
administration. Whether my support is high or low, I shall
not slacken this structural reform efforts that I've made. This policy
of structural reform will not change whatsoever, I explained this to
President Bush -- the measures against inflation and measures to
prevent the financial unrest -- but we will do all our best in this
regard.

So there will be absolutely no change to the structural reform
efforts that the Koizumi administration has maintained, that it may
only be strengthened, but it will not change, the policy -- will not
change. Ten years ago, Japan perhaps was a little
over-confident. Today, Japan has lost confidence in
itself. But Japan has to regain confidence in itself; and,
with hope, if we work on the structural reform, then definitely Japan
shall be able to revive its economy. And the potentials of
Japan can also come to the fore.

And it is to that end that the Koizumi administration has been
working on structural reform and President Bush has shown his
understanding towards this and has expressed his strong support for
this policy of mine.

On global challenges, there is the global warming issue and Kyoto
protocol question. The United States has come up with a very
positive proposal, the problems of environment and the problems of
economy. These should proceed hand in hand and they should
not run counter to each other on the future problems of the
globe. The technological development in the interest of the
environment will produce economic growth.

So economy and the environment do not run against each other;
rather, efforts to improve the environment will bring about science and
technology -- development in science and technology and thus, also
generate greater economic development. This perspective
should not be lost.

Japan will aim at achieving both economic growth and environmental
improvements. So Japan welcomes the positive proposal on
global environment issue, and we appreciate the stance shown by the
United States to contribute on that front, and we'll expect greater
efforts in that respect.

On the environmental questions, economic questions and so on, in
these broad areas Japan wishes to engage in discussions with the United
States and cooperate with the U.S. So I was able to have
very candid exchange of views on all these and numerous other issues.

This, as I said, was our fourth meeting, but I feel as if we've met
each other umpteen times already. In fact, we were able to
exchange views on almost anything. Our relations are built
on a deep mutual trust and, building on that, we'd like to further
develop our relations. And I believe it will be important
for Japan and the United States to cooperate on these and numerous
other issues, because in doing so we'll contribute not just to Japan
and the United States, but to the entire world, as well. And I think
it was a great meeting.

PRESIDENT BUSH: Thank you very much, Mr. Prime
Minister. It is a real pleasure and honor to begin my trip
to Asia here in Japan. And the reason why our first stop is
here in Japan is because Japan is one of America's greatest and truest
friends.

I also want to thank my friend, the Prime Minister. He
is a man whose word I trust, a man whose advice I seek, and a person
with whom I've got good personal relations. And I want to
thank you for your friendship and your generous hospitality.

I believe the U.S.-Japanese alliance is the bedrock for peace and
prosperity in the Pacific. Japan is a generous host to
America's forward-deployed forces, providing an essential contribution
to the stability of Asia. This enduring partnership benefits
both our countries, but it also benefits the world. The
peace of the world is now threatened by global terror. And
we have had no better friend, and nobody provides such steadfast
support than the Japanese government.

I remember the phone call, Mr. Prime Minister, you gave me when I
was in the Oval Office. It meant so much to hear -- in this
right after 9/11, it meant so much to hear your voice and your
steadfast support, which has not wavered. And I want to
thank you and the Japanese people for that.

Japan also understands that in order to complete the first theater
in the war against terror that we must help Afghanistan
rebuild. And I want to thank you, Mr. Prime Minister, and
your government, for hosting a very important
conference. Today we had a -- we spent some -- a good deal
of time talking about how to make sure that the Afghanistan of today,
the post-Taliban Afghanistan is stable and has a chance to achieve
prosperity and security and peace for her citizens. And
Japan plays an incredibly important role in that. Japan also
has aided people throughout the world. Japan is a generous nation,
it's helping the developing nations with health and education
needs. And for that we are also very grateful.

Prime Minister Koizumi and I not only reaffirmed the importance of
the Japanese-United States security alliance, we also talked about our
economies. I told him that our economy is still in a
recession, but there are some hopeful signs that we're
recovering. There are some signs that the tax relief plan
that we put in place is having a positive effect, so that we're
beginning to see some growth.

I also, obviously, talked to him about his strategy for the
Japanese economy. And he mentioned about
confidence. Well, let me tell you what my confidence level
is like: I'm confident in this man's leadership ability; I'm
confident in his strategy and I'm confident in his desire to implement
that strategy. And when he implements the strategy, it will
help Japan's economy a lot. And that's
important. It's important not only for our bilateral
relations, it is important for the world's second largest economy to
grow. It'll help the region and it will help the world.

And so, Mr. Prime Minister, it is my honor to come to your
beautiful country. I want to thank you very much for your
hospitality. Laura thanks you for your hospitality, as
well. And I look forward to our meeting tonight, and the
chance to speak to the Diet tomorrow. And, as importantly, I
look forward to meeting the Imperial Majesties, the Emperor and the
Empress.

Thank you, sir.

PRIME MINISTER KOIZUMI: Thank you very
much. Do you have any questions please?

Q First, a question for President
Bush. In the early meeting, did you make any specific -- did
you ask the Prime Minister to take any specific actions on the Japanese
economy? Much is said about the triple lows for the Japanese
economy, and some speak of an impending financial
crisis. Which would you like Japan to give priority to,
structural report or anti-deflation measures? And Prime
Minister Koizumi, what sort of balance do you intend to strike --

PRESIDENT BUSH: First of all, before I had a chance to
bring up the economy, the Prime Minister brought up the economy in our
private discussion. He said, I want to make it very clear to
you exactly what I intend to do. And he talked about
non-preforming loans, the devaluation** issue, and regulatory
reform. And he placed equal emphasis on all three.

(** deflation)

And I'm not here to give advice, I'm here to lend
support. When he looked me in the eye and told me that he is
going to take measures necessary to improve in all three regions, I
believe him. I believe that's his intent. And
that is good news, because it's going to require a strong leader to
deal with the difficult problems facing the Japanese economy.

Q Mr. Prime Minister?

PRIME MINISTER KOIZUMI: He asked about structural reform
or measures against inflation. That question, itself, I
think is built on a wrong perception. Whatever the situation
may be, Japan needs to carry through its structural
reform. Of course, there are many activities that are going
on where government is not involved, and we can invite the private
sector to come into areas that were covered by the government, and we
should carry forward regulatory reform, as well. And there
will be, of course, confrontation with the vested interest.

Whatever measures we may take, financial measures or deflationary
measures or fiscal policy measures, or what, and I will not change my
stance. So it's not really a question of which should be
given priority, structural reform or deflation
measures. Whatever the situation may be, we have to
implement a structural reform. So the Koizumi administration
will never slacken its efforts to work on structural reform.

I hope you understand that point full well. Some might
think that I'm going to shift from structural reform
measures. I'm aware of those voices. But that will never
happen. Whatever the situation, structural reform needs to
be implemented. And without that, there cannot be economic
revival of Japan.

And having said that, deflation measures or monetary easing, these
are measures needed to accelerate structural reform. So
whatever the situation may be, I will never slacken the structural reform.

Q Mr. President, you expressed confidence in
the Prime Minister again today. But he's been in office for
about a year now, and he's been unable to enact structural
reforms. Why do you think it's taken so long for the
Japanese government to enact the reforms you're talking about?

And to the Prime Minister, you called the President's alternative
to Kyoto a positive proposal. That given, do you think the
world's environment would have been better off if America had signed on
to Kyoto?

PRESIDENT BUSH: The second question is
moot. What was the first question? (Laughter.)

Q Why has it taken --

PRESIDENT BUSH: Oh, that's right,
yes. Listen, sometimes it is very difficult to get a reform
package done in any society, but particularly structural
reform. And what the Prime Minister is proposing is a bold
agenda. And it takes somebody who's willing to spend
capital, political capital, to get the agenda done.

So I am -- my main focus of this meeting was to judge intent and
desire and willingness to work hard to achieve a bold
agenda. And having listened to the Prime Minister at length
today and looked him in the eye, I feel very confident that that's
precisely what he is going to do -- pursue a bold agenda.

And sometimes it is not easy to get others to follow, but that's
his job, is to lead. And he knows that. And
that's why, one, I like him a lot, because I appreciate bold
leadership. And, secondly, he is going to stay the
course. And that's important, as well.

PRIME MINISTER KOIZUMI: Well, some might say we're slow,
but we're moving steadily. It's been less than one
year. Many people say there haven't been tangible
results. But look at Thatcher reform, or Reagan reform --
none of these reforms were achieved within a year or two. In
fact, the results of the Reagan reform came to fruition after he had
retired. So it's been less than one year, and I would like
to say that we are making steady progress.

Of course, in certain areas we can achieve results in nine or ten
months. But I hope you understand that there are areas where
we have been making steady progress. Of course, there is a
need for coordination with the Diet, with the
parliament. And there are areas where we cannot proceed
without their approval. But we are proceeding
steadily. And of course, we are striving to move forward our
reform. But we're not falling behind at all.

As for the Kyoto protocol, Japan has been very tough on the
environmental questions, and we've been very active. I
certainly understand the circumstances in the United States, but of
course we will continue to work so that we can cooperate with the
United States. It is a question for the United States to
decide whether to take part in the protocol or not, but I hope we will
continue with our efforts so that we can move in the same direction, as
I said earlier. Both the economy and the environment can be
improved together. And we'd like to see further efforts on
the part of the United States.

Q A question for President
Bush. You referred to Iraq as the axis of
evil. And I wonder if in the meeting you referred to the
possibility of exercising force and, if so, what did you
say? And what role would you expect of Japan?

Mr. Koizumi, if the U.S. really exercises force, what specifically
would Japan do?

PRESIDENT BUSH: -- talked about my speech I gave to the
Congress. Japan is one of our strongest allies and close
friend. And I explained to the Prime Minister that there are
some nations in the world which want to develop weapons that will hurt
the United States and/or our friends and allies, and we've got to stop
them from doing so.

I also reminded him, in the speech I talked about the need for
nations to come together, to work together. And I reiterate
that, that we've got a coalition of freedom-loving nations that can
work together to, hopefully, help them change their
behavior. I also explained to him that all options are on
the table and that I will keep all options on the table.

Other than that, there are -- there's nothing else to talk
about. We want to resolve all issues peacefully, whether it
be Iraq, Iran or North Korea, for that matter. And as you
know, I'm going to the Korean Peninsula to talk about that very
subject. On the one side of a parallel we've got people
starving to death, because a nation chooses to build weapons of mass
destruction. And on the other side there's
freedom. And it's important for those of us who love freedom
to work with nations to convince them to choose freedom.

But I've also said that they should make no mistake about it, that
we will defend our interests, and I will defend the American
people. And that's what we talked about.

PRIME MINISTER KOIZUMI: With regard to this axis of
evil, again we exchanged our views very frankly. Iraq, Iran,
North Korea, we exchanged our views regarding these countries very
candidly.

The expression "axis of evil" I believe reflects the firm resolve
of President Bush and the United States against
terrorism. President Bush, I believe, has been very calm and
cautious vis-a-vis Iraq, Iran and North Korea. He will not
exclude any possibilities in order to prevent the proliferation of
weapons of mass destruction, to prevent terrorism. He will
resort to all possible means to fight against terrorism. And
I believe this resolve was behind the expression, "axis of evil."

Now, this fight against terrorism is not going to be a short
one. I understand it's going to be a drawn out and tough
fight. And Japan, together with the United States and the
international community, will, on its own initiative cooperate very
actively. And I believe Japan's role in the fight against or
eradication of terrorism will be very important. And Japan
shall continue to support the United States. So that's the
sort of exchange of views we had.

Q Mr. President, the French Foreign Minister
called your axis of evil remarks simplistic, and a top European Union
official has accused you of taking an absolutist position on
this. If you do not get the kind of support that you just
suggested from your allies, is the United States willing to go it
alone?

PRESIDENT BUSH: Well, first of all, the Secretary of
State had, I thought, an interesting reply to the French Foreign
Minister. And you might want to ask him afterwards what he
meant by vapors.

People who love freedom understand that we cannot allow nations
that aren't transparent, nations with a terrible history, nations that
are so dictatorial they're willing to starve their people, we can't
allow them to mate up with terrorist organizations. In the
war against terror, one of the worst things that could possibly happen
is al Qaeda-like organizations becoming allied and operationally
attuned to nations which develop -- which have a weapon of mass
destruction. Freedom-loving people understand that. And I'm
going to continue making the case.

Now, listen, I understand what happens in the international arena;
people say things. But the leaders I've talked to fully
understand, exactly, what needs to happen. They understand
the resolve of the United States of America. They understand
that our commitment is not just in Afghanistan, that history has given
us a unique opportunity to defend freedom. And we're going
to seize the moment, and do it.

And I'm confident nations will come with us. Right here
is a Prime Minister that has said he's our friend, he is a part of a
coalition, and he's going to be steady in our coalition. And
for that I'm very grateful. And the other world leaders I have talked
to have expressed the same resolve and determination. And so
I don't accept the hypothesis of your question.

PRIME MINISTER KOIZUMI: Thank you very
much. This concludes the press conference.